Today‘s Morning Meeting

Research evidence excerpt

Today‘s Morning Meeting

Europe Equity Research

Europe First to Market 10 July 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

Today’s Morning Meeting

CW | | EMEA Diversifieds (Dominic O'Kane)

Q2’26 into the print: valuation support emerges but cost inflation set to bite. Place Anglo American

on -ve CW

Since 9 March we have recommended reducing exposure to European Diversified Miners (link), expecting that the energy price

shock could be absorbed via lower economic growth, lower metals prices and cost inflation for Miners. Our central thesis for a

collapse in copper prices to <$10,000/t has not materialised, yet over the period M&M has underperformed MSCI Europe by -

7%, since June is -20% vs MSCI Europe +2%. Stocks now trade close to our price targets, suggesting valuation support at

current commodity prices. However, we retain a cautious bias pre-Q2 reporting as we expect: 1) cost-inflation driven earnings

disappointments; and 2) fluid geopolitical and commodity price risks. We see the greatest cost-driven risks in Anglo American

(UW) due to unique exposure to high Brazil and South Africa iron ore freight rates. We sit -6% vs BBG consensus for H1’26

EBITDA and we place Anglo on Negative Catalyst Watch for 23 July. Glencore (Neutral) also faces significant exposure to >3x

higher sulphuric acid costs in African Copper. For both Anglo and Glencore, an update on the Collahuasi desalination plant

suspension carries tail risk; we believe a prolonged suspension would have implications for copper recoveries. Rio Tinto

(Neutral) is emerging as a value candidate, as the shares now trade at a ~25% discount to our £82.50/sh PT, but we retain

caution on Q2 cost impacts.